Good morning, and welcome to Bankinter's third quarter earnings presentation. Our financial statements were posted with market authorities earlier this morning, and all materials can also be found on our corporate website.

Please refer to disclaimer in the presentation, and note that this call is being recorded. We welcome today our Chief Executive Officer, Gloria Ortiz, and Chief Financial Officer, Jacobo Díaz.

Thank you, Laurie, and welcome to you all. We are reporting today third quarter results showing steady growth.

We closed the first nine months of 2026 with a net profit of €901 million, 11% more than in the same period last year, which represents a return on tangible equity of 20.4%, a percentage point better than in the same period of 2025. The results are supported by the profitable growth of the business.

We grew by 7% in customer volumes, which translates into 6% increase in revenues, supported by net interest income, which is up 6% year-on-year, due to the volume growth accompanied by a disciplined management of customer margins that reached 2.7% in the quarter. We maintained rigorous cost management, as reflected in the efficiency ratio that is now below 35.

We also maintain excellent asset quality, with a non-performing loan ratio of 1.84%, and a solid solvency with a CET1 ratio at 13.2%, well above regulatory minimums. All this growth in volumes, discipline in margins, asset quality, and operational efficiency allow us to generate value for shareholders in a sustained manner, with shareholder value generation increasing by 15% over the last 12 months.

Commercial activity this year has once again showed strength. Total customer business volumes amount to €250 billion, €16 billion more than in the same period of 2025, with 6% growth in lending and 8% in customer funds, while maintaining a loan-to-deposit ratio at a comfortable figure of 98%.

This provides us with ample flexibility to continue growing lending selectively and profitably, without funding becoming a constraint. Customer volumes are highly diversified, with the new geographies contributing 13% of the total book, and Spain the remaining 87%.

Where Spain represents a growth in volumes of 6%, Portugal of 13%, and finally Ireland of 26% over the previous year. New geographies continue to increase their contribution to incremental volume growth, where they represent already 25%.

This is the type of growth we want: organic, geographically diversified, and profitable. It strengthens the franchise, supports recurring revenues, and reduces our dependence on any single market or business line.

Net interest income continues to evolve positively, reaching €1.76 billion in the first nine months, 6% more than in the same period last year. In quarterly terms, NII reached a new high of €602 million, while customer margin remained resilient at 2.71%.

This performance reflects healthy volume growth together with disciplined and active management of customer margins, and demonstrates the resilience of our revenues as the interest rate environment evolves. Discipline in the management of operational efficiency and asset quality drives capital generation in the quarter.

CET1 closed the third quarter at 13.2%, 20 basis points higher than in the previous year, and 46 over the close of 2025. Efficiency in the first nine months of the year stood at 34.8%, 1.3 percentage points better than in 2025.

Asset quality also remained excellent, with NPL ratio improving by 10 basis points to 1.84% if compared to December 2025, and we also maintain a solid coverage ratio. This combination of efficiency, asset quality, and organic capital generation gives us the capacity to fund profitable growth while maintaining comfortable management buffers.

For us, AI is a business transformation program grounded in the pragmatic use of technology, focused on productivity, customer service, and scalability. We consistently invest more than 10% of our gross revenues in technology.

Over the last six years, this investment has allowed us to increase customer volumes by 56% and revenues by 87%, while employee numbers increased by only 9%, and the number of branches remained stable. At the same time, costs only increased by 34%, less than half the rate of revenue growth.

Among the investments in technology, I would like to highlight our AI-first program. From a top-down perspective, this involves significant investments in technological infrastructure and data, in the governance of AI deployment, and in corporate strategic project programs in which we integrate AI in the bank's operational and commercial processes in a transparent way for employees and customers.

Secondly, the bottom-up perspective has a lot to do with cultural change and personal productivity, and requires significant investment in training the workforce, making tools available to employees, and in the deployment of corporate systems that allow the creation of agents to be shared in a governed and controlled manner. The progress made in AI capabilities over the past two years has been considerable, with more than 150 advanced AI models and 60 GenAI systems in operation.

The areas in which this deployment of capabilities is having the greatest impact are software development, automation of operational processes, commercial efficiency, improvement of the user experience in digital assets and telephone banking, as well as in the personal productivity of employees in their day-to-day work. Finally, to wrap up this first section of the presentation, you can see the impact of our strategy in the key value creation ratios.

We report once again a high and sustainable value creation. RoTE reached 20.4%, earnings per share increased by 11%, and shareholder value generation increased by 15% over the last 12 months.

Now, on to you, Jacobo.

Thank you very much, Gloria. Good morning, everybody.

Let me start with a brief overview of the results. The first nine months of the year demonstrate the continued strength of our franchise and business model, with results supported by solid revenue growth, disciplined cost management, and stable risk costs.

Net profit reached €901 million, up 11% year-on-year. I will now talk through the main drivers behind these results, starting with NII on next page.

NII continues to evolve very favorably, reaching €602 million in the third quarter, our sixth consecutive quarterly increase. NII increased by 6.3% year-on-year and by 2.1% quarter-on-quarter.

During the quarter, asset yields increased by 7 basis points, while deposit costs increased by 6 basis points, allowing us to maintain customer margin at 2.71% and NIM at 1.75%. Overall, this continues to show the benefits of volume growth together with disciplined pricing on both sides of the balance sheet.

Moving now into fees, fees continue to be an increasingly important contributor to revenue growth, reinforcing the diversification of our business model and the growing contribution from the wealth management business. Net fees increased by 13% year-on-year to €651 million.

Even excluding the €23 million performance fee recorded in the second quarter, underlying recurring fee growth at strong 9%. Wealth management activity continues to perform very well, with asset management and brokerage revenues increasing by 22%.

Insurance fees increased by 8% when including RJVs accounted for under the equity method. Overall, these results reflect deeper customer relationships and a growing contribution from recurring, higher value-added products and services.

This strong revenue performance also continues to translate into positive operating leverage, bringing me to the next slide. Revenue growth of 6.5% significantly exceeded expenses growth of 2.3%, maintaining positive jaws of more than 4 percentage points this year.

As a result, our cost-to-income ratio improved further to 34.8%. Importantly, as Gloria already highlighted, this has been achieved while continuing to invest in technology and digital transformation across the group and future growth initiatives.

For Bankinter, cost discipline does not mean lower investment. It reflects a simpler organization, the tangible benefits of technology, and an increasingly scalable operating model focused on long-term client relationships.

Moving now to risk costs on page 16, we continue to grow the balance sheet while maintaining a clear focus on quality. Customer lending grew by 6%, while cost of risk remained stable at 33 basis points, and other provisions declined further to 8 basis points.

This combination of loan growth and stable risk costs reflects our underwriting discipline and selective approach to growth. We remain focused on attractive risk-adjusted returns rather than pursuing volume at any price.

Regarding net profit, revenue growth, efficiency, and risk discipline are clearly visible in earnings, with profit before tax increasing by 11% to €1.27 billion, and net profit increasing by 11% to €901 million, as I mentioned before. That same discipline is also reflected in the quality of our balance sheet, that we will see in next page.

Asset quality remains one of the clearest differentiators of Bankinter franchise. The group NPL ratio improved by 21 basis points year-on-year to 1.84%.

Across Spain, Portugal, and Ireland, NPL ratios remain comfortably below sector average. Spain stands at 2.0% versus 2.5% for the sector, Portugal at 1.4% versus 2.1%, and Ireland at 0.3% versus 0.7%.

Moving into liquidity, we continue to maintain a strong and balanced liquidity position, with a 98% loan-to-deposit ratio and an LCR of 168%. During the quarter, our liquidity gap remained stable at €2.6 billion, with significant excess liquidity in Spain.

We also maintain substantial liquidity reserves, limited refinancing need, and strong access to wholesale funding markets when needed. We therefore maintain a significant flexibility in how we fund the balance sheet.

This supports future lending growth, as well as the continued development of off-balance-sheet products and customer solutions. Turning to capital, CET1 ratio closed the quarter at 13.18%, supported by 74 basis points of organic capital generation over the first nine months, including 42 basis points in the third quarter.

This strong generation allowed us to absorb a 16 basis points impact from the Tulp acquisition, while increasing our CET1 ratio by 27 basis points from 12.91% in the second quarter. Looking ahead, we expect to close the Plinium and Access Capital Partners alternative investment transaction next quarter, with a combined capital impact of approx 25 basis points.

We will also increase of around 40 basis points in our minimum capital requirement from the second phase of the Spanish countercyclical buffer, that, by the way, we announced also this morning. Even after these items, we remain very comfortable with our capital position and our flexibility to support profitable growth, selective investment opportunity, and attractive shareholder remuneration going forward.

Moving now to a quick review of the performance of our businesses and geographies, starting with corporate and SME banking. Corporate lending increased by 7%, compared with sector growth of 4% in Spain, with our international business growing strongly at 16%.

We are reinforcing our competitive advantage through a new servicing and corporate segmentation model, increasing product penetration and innovation, and growing more transactional businesses such as factoring and confirming. This will deepen customer relationship and act as a catalyst for growth, with a greater contribution from capital-efficient revenues, like fees.

In retail banking, on next page, we continue to prioritize profitable growth and disciplined capital allocation, directing growth towards the customer segments and geography where we see the most attractive risk-adjusted returns opportunities. On the asset side, mortgage origination is recovering, up 8% compared with the same quarter last year, with around half of the new production coming from Spain, and the other half from Portugal and Ireland.

Our mortgage-backed book also grew by 5% to €40 billion, including approximately €400 million of Dutch mortgages following the recent Tulp acquisition. We expect to start new origination under a Bankinter mortgage proposition in the Dutch market over the coming months.

We also provide more details this quarter on our smaller consumer finance portfolio. Balances increased by 11%, excluding the open market segment, which continues to decline as part of our strategy to reduce portfolio offering lower returns after losses and capital consumption.

On the liability side, transactional balances also continue to grow, with salary and digital account balances increasing 6% year-on-year. Moving now to wealth management and off-balance-sheet products on page 24, where we continue to deliver very strong growth across both assets under management and assets under custody.

AUMs increased by €10 billion, or 15%, over the last 12 months, while assets under custody increased by €12 billion, or 14%. Together, both now exceed €170 billion, around twice the size of our customer on-balance-sheet deposits, reflecting the high quality of our customer base and our ability to deepen relationships through value-added investment products, advisory service, and innovative portfolio of management solutions.

Importantly, movements from deposits into investment products does not represent money leaving Bankinter, but rather a transformation of customer savings within the franchise, deepening relationship, increasing product penetration, and supporting revenue diversification. Let me now review our progress from a geographical perspective, starting with the overall picture.

Our strong volume growth remains well diversified across the group, as I mentioned before, with Spain growing by 6%, Portugal by 13%, and Ireland by 26%. Revenues also increased across all three geographies, with particularly a strong double-digit revenue growth in Portugal and Ireland.

Let's see briefly at each geography, starting with Spain. Spain continues to deliver strong and profitable growth, with customer lending up 3%, or around €2 billion year-on-year, broadly in line with the growth rate achieved in full year '25.

NII increased by 4% and fees by 13%, supporting gross operating income growth of 5%. With expense growth contained at just 1%, pre-provisioning profit grew by 8%, and profit before tax by 10%.

This demonstrates the scalability of our core Spanish franchise, where technology and a simpler operating model allow us to grow the business while continuing to keep costs under control and deepen customer relationship, as reflected in the customer funds growing 9% year-on-year. The 89% loan-to-deposit ratio is similar to the average of the Spanish industry.

Moving into Portugal, where the franchise continues to scale strongly and profitably. Customer lending increased by 9%, or €1 billion, while customer funds grew by 18%, or €3 billion, maintaining the strong growth rates achieved in '25.

This translated into net interest income and fees both increasing by 13%, with profit before taxes reaching €178 million, also up 13%. With an excellent cost-to-income ratio of 32%, Portugal is a strong example of our ability to scale a proven business model and gain profitable market share.

Going forward, our focus is to close the remaining small funding gap through continued growth in customer funds, while further increasing customer penetration across segments and products. Finally, let's move to Ireland.

Ireland continues to deliver strong growth as we progressively build out our universal banking proposition in the Irish market. Customer volumes increased by €1 billion, or 26%, including the start of our deposit-gathering activity this year, with balances growing, supported by our recent marketing campaign with very positive results.

At the same time, the business is delivering strong profitability. NII income increased by 21%, supported by asset growth, while profit before taxes also grew by 21%, and the cost-to-income ratio improved to 43%.

As we continue to broaden the franchise, our objective is to increasingly fund future lending growth with locally generated deposits, building a more balanced and self-funded business over time. Overall, Ireland continues to gain scale and broaden its customer proposition, while maintaining a strong profitability and asset quality.

Let me move now finally to our outlook and growth priorities. Our underlying business trends continue to evolve positively, in line with our expectation, in a solid, for-longer trend supported by robust current and expected macro scenario, reinforcing our confidence going forward.

We remain focused on the levers we can actively control, which is disciplined execution of digital transformation programs, disciplined pricing of both sides of the balance sheet, customer margin management, cost control, and, of course, capital allocation. On volumes, we continue to expect solid and diversified growth.

Lending growth should remain around the current mid-single-digit levels, with Spain maintaining solid momentum, and Portugal and Ireland continuing to grow at faster rates. Deposit growth this year should continue in line with current trends, being low-single-digit growth.

At the same time, the superior quality of our increasing client base in all our geographies will continue to support growth in customer funds and deepen customer relationships through asset under management and custody, supporting both our funding position and recurring fee generation. Our guidance continues to carry a positive bias in the short and mid-term.

Volume growth, resilient customer margin, and the current rate environment should continue to support positive NII development, with continued quarter-on-quarter growth, slightly above loan growth. We expect customer margin to remain around current level, with positive bias in coming quarters, supported by active pricing management on both assets and deposits.

We also continue to maintain a balanced and prudent approach to interest rate sensitivity, rather than seeking to maximize short-term returns from a particular rate scenario. On fees, the outlook also remains strong, with guidance of low double digit, supported by wealth management, higher customer activity, and the increasing contribution from recurring, value-added products.

On cost, we remain fully committed to delivering positive jaws. We will continue to invest in technology, people, and future growth, while maintaining cost discipline and improving the scalability of the business.

We are on track to end this year with a cost-to-income ratio below 35%, with operating jaws in line with current levels of around four full points. Asset quality should remain strong, and we expect cost of risk to remain around current levels, with guidance unchanged around 33 bps for the entire year.

Finally, we expect to continue generating capital organically. Our priorities remain clear: first, support profitable organic growth; second, invest selectively in attractive strategic opportunities; and finally, be open and flexible, if necessary, to ensure attractive shareholder remuneration in the future.

Bankinter has always delivered in the long term and through periods of uncertainty a superior shareholder remuneration, combined with a prudent risk approach. Taken together, these trends support our expectation of maintaining a return on tangible equity above 20% for longer, while continuing to grow tangible value per share and dividends.

Gloria, back to you, please. Thank you.

Thank you, Jacobo. Before concluding the presentation, I would like to come back to our strategy, which is focused on creating sustainable value through the cycle.

We combine three sources of growth: continuing to deepen our mature franchise, scaling younger platforms that have already demonstrated their growth potential, and building new earning engines that will support future growth and diversification. In Spain, our largest and most mature market, we continue to increase the value of the franchise through selective customer growth, deeper relationships, stronger value propositions, and product innovation, while technology and AI allow us to scale the business more efficiently.

In Portugal, we continue to scale a proven franchise through disciplined market share gains, profitable customer growth, and increasing self-funding. In Ireland, we are accelerating the transition from a specialist lending business to a self-funded digital universal banking franchise.

At the same time, we are investing selectively in future growth opportunities. Tulp has been part of the Bankinter Group since August, and provide us with a capital-efficient option for future growth through an established digital mortgage platform in the Netherlands.

Through the two announced alternative investment transactions, we are building greater scale and capabilities in a differentiated investment management platform, increasing recurring revenues, operating leverage, and earning diversification. This approach is not new.

It is consistent with the strategy Bankinter has followed for many years, and our track record demonstrates our ability to grow above the sector while creating attractive value for shareholders. To conclude, we are once again delivering strong results based on recurring customer activity and consistent execution of our long-term strategy.

We continue to grow with quality, while improving efficiency, maintaining strong asset quality, and increasing the diversification and scalability of the group. With high and sustainable returns and comfortable capital position, we remain well positioned to continue growing and compounding value for shareholders through the cycle.

That concludes our presentation. Thank you, and back to you, Laurie.

Thank you. Thank you, Gloria.

Thank you, Jacobo. We'll now be moving into the live Q&A section.

Our first question comes from Max Mishyn from JB Capital. Max, please go ahead.

Hi, good morning. Thank you very much for the presentation and taking our questions.

Two questions from me, please. The first one is on the NII, and assuming that the interest rate curve stays where it is right now in the future, when do you expect the repricing of the loan book to end?

The second question is on the recent ruling by the EU Court of Justice related to cyber fraud and its refunds to customers. I was wondering if you expect any impact on your other provision line from the ruling.

Thank you.

Thank you. Thank you, Max.

I will answer first the second one. For the time being, we're not expecting any changes from that ruling or that decision from the Tribunal de Justicia.

The first one, repricing of the asset side, it takes longer. As it takes some time, from 12 to 24 months, to fully reprice our mortgage book, or I would say the floating-rate mortgage book.

It's something that is going to take some time. We are just starting to see that repricing, and it should go over the next quarters.

I would just want to say something about the second question. It is true that there has been a ruling in the European Court of Justice that basically obliges to return immediately to a client funds that were a fraud, a payment that was a fraud.

One thing is that obviously it is a superior court of justice, but cases are seen one by one in, well, in this case, in the Spanish Court of Justice, and case-by-case all the items of the case are evaluated. It is not of immediate application.

That is why we don't think there will be any specific impact. On the other hand, I want to just refresh a little bit the idea that we actually do millions of transactions in a secure manner every day, and that we have very little problems or fraud involved in it.

We are investing heavily, and we continue to do so, to even reduce further all these cases of fraud. The other thing I want to say is that we also have to invest in, making clients conscious of the risk they're taking, and not to share their, not to share their passwords and so on, to minimize fraud.

Thank you. Our next question comes from Marta Sanchez from JP Marta.

Marta, please go ahead.

Thank you very much. My first question is on the customer spread.

It was flat quarter-on-quarter at just 2.71%, and the lending side looks soft. What stands out is that the pressure on loan yields doesn't seem to come from chasing volume.

Your Spanish loan growth was just 1.8% year-on-year. Can you explain what's driving the tighter lending spreads in Spain by mortgages and corporates?

You've mentioned there's upside to the customer spread, can you provide color on the level and where you see lending and deposit margins kind of settling? My second question is on capital.

By our math, you should finish the year well above 12.5% Core Equity Tier 1, even after absorbing what, roughly 37 basis points from acquisitions and operational risk inflation. Would you top up the 50% ordinary payout with a special dividend, possibly as soon as with full-year results?

Thank you.

Hello, Marta. I will answer the second question.

Effectively this year we will finish the year around 13% after absorbing what you've mentioned, the two corporate transactions that we have announced, and the operational risk consumption. You also have to take into account that there will be also increases in the minimum regulatory ratio because, for instance, in Spain, there are certain buffers that this year will come into force.

I think we feel quite comfortable operating with a management buffer like the one we have, or up to 500 basis points. If we go over 500 basis points, I think we will consider something different, to change our policy in terms of what we do with dividends and what the retained profits.

This is something that won't happen by the end of the year. So...

Good morning, Marta. I'm not sure if I got properly your question.

I think it was regarding the lending growth and the customer spreads, and what is the mix of this growth. In Spain, that we're growing around 2% the book, the year-on-year growth is focused on corporates.

As the new production of mortgages is a little bit lower than a year ago, and the overall mortgage book in Spain is some sort of stable. That means that the repricing of this book anyway it's going to take some time.

The floating-rate mortgage book has barely started to reprice with the latest increases in the Euribor, we should expect positive increase in the lending yield over coming quarters. I'm not sure if I am answering your question.

If not, let me know.

Marta, does this answer your question?

Sorry, I don't know if you can hear me. No, it's the customer spread.

So 2.71%, that is disappointing, given what we've seen in the sector this quarter. You have mentioned that there's upside to that customer spread.

Where do you see that setting, and how do you see the lending margin and the deposit margin within that customer spread? Thank you.

Thank you, Marta, understood now. As we will provide guidance in the first, with the results of the end of the year.

As I mentioned, we think there is a positive bias, and rates are absolutely supporting the client margin over time. As you can imagine, the timing of the movements of each part of the NII is different, there might be probably some faster repricing in the deposit side versus much smaller repricing the asset side.

In terms of quarter after quarter, there might be a little bit volatility, but obviously overall a higher interest rate environment should be very supportive of customer spread in the future.

Thank you.

Thank you. Our next question comes from Pablo de la Torre from RBC.

Pablo, please go ahead.

Hi, and thank you for taking my questions. I had two questions.

My first one was on your deposit trends. I see payroll and digital account balances were flat quarter-on-quarter, while time deposits picked up a little bit at the group level.

I wondered how much of the change in time deposits was driven by Ireland in the quarter, and more generally, where you see the mix between sight and time deposits in the medium term under the current rate outlook. Then the second question was a short one on the ALCO.

I see obviously maturities are picking up over the next two years, and I wondered if you could just remind us where the yield of those maturities is, compared to the 2.7% for the entire book that you show on the slides. Thank you.

Good morning, Pablo. There is a slight increase in the proportion of time deposits.

We haven't started definitely the gathering of term deposits in Ireland, although the volume is not yet relevant. The reality is that there is a little bit more demand for term deposits, since T-bills in Spain have increased, and there is a little bit more demand of this product.

Overall, in relative terms, we do not expect any major change in the mix. I think that today term deposits are around 15% of the overall in Spain is around that figure.

We might expect some small figure of points maybe going up, but definitely we're not expecting a change in the mix. As you have mentioned, we are currently launching campaigns also related to digital accounts, etc., we do not expect a change in the mix.

It might be a slight change, but not definitely something different. Regarding the ALCO portfolio...

Yes, Pablo asked us the repricing of the maturities, the current repricing currently is around 2.7% the yield, and what the upside may be from the repricing of the maturities coming up in 2027 and '28.

I'll answer that, Pablo. I think by the end of 2027, we can be in the 3% yield or a little bit higher.

Thank you. Our next question comes from Miruna Chirea from Jefferies.

Miruna, please go ahead.

Good morning, Gloria, and good morning, Jacobo, and thank you very much for the presentation. I just had two very quick questions.

Firstly, could you please remind us of the structure of your balance sheet on the asset side, as in how much is floating versus fixed rate in mortgages and in corporates, and the average duration of the fixed-rate loans in each of the two segments? Also could you then give us, please, an update of how the digital campaigns have progressed in Q3, please?

We have around 50%, 55% of our mortgage book in floating-rate mortgages. I think that's the current mix.

Even in our corporate book, we have, as working capital facilities that even if they are fixed rate, they reprice in a maximum of three months, 90 days. It is not floating, but it has faster repricing that maybe other type of loans with a longer term.

From the half of the book that is fixed, there is a part obviously that is hedged and therefore floating. It's around what, €8 billion more or less.

Oh,

sorry, regarding the digital marketing campaigns...

Oh, the digital market campaign is doing well. Actually, we are increasing client acquisition in September when we started the campaign.

We are actually growing in balances, slightly, but growing in balances. Actually, we are able to retain more than half the clients that we onboard, that's what we see from last campaigns, and we are also able to cross-sell to these clients other investment products or saving products for around 30%, 40% of the cases.

Thank you. Our next question comes from Cecilia Romero from Barclays.

Cecilia, please go ahead.

Thank you very much for taking my questions. My first one is on costs, and the second on deposit competition.

Costs have been tracking really well despite inflation remaining elevated. Should we still think about 3% to 4% cost growth as a reasonable medium-term run rate, given the level of inflation that we're seeing, or should we expect a period of somewhat higher costs and investment spending, particularly around technology, AI initiatives, digitalization?

Then in terms of deposit competition, it obviously has become a much bigger discussion point across Spain. Customer margins, as it was pointed out before, were stable.

What are you seeing today in terms of pricing behavior, and has your view on deposit betas remaining stable or improving changed over the last quarter? Thank you.

Yes, thank you, Cecilia. Regarding costs, absolutely, we are managing costs quite efficiently.

That we think that we can keep increasing or improving our efficiency without any restructuring program, branch closure, or sacrificing growth. Efficiency stands at 34.8%.

We keep investing quite strongly, and we still rely on AI investments, data, on automatization, process redesign, employee augmentation, and organization simplification. Definitely inflation is going to put a little bit of pressure in the future into the level of costs, but as I mentioned during the first part of the call, we are fully committed to preserve positive jaws year after year.

That means that our cost-to-income ratio, we should expect to keep improving year after year.

With respect to what we're seeing in deposit pricing, obviously when interest rates go up, saving products are more attractive, and there is a greater competition for these savings. I always say that we are not competing for deposits, we are competing for the confidence of our clients.

Because at the end of the day, what we are doing, for instance, in the digital organization, is actually trying to acquire clients, but to set long-term relationships with them, deepening the relationship, and having a deeper, a more constructive relation than just a deposit. Because if you pay, let's say, 10 basis points, you might be able to attract more customers, but these customers are going to stay with you because of the quality of service and the value proposition that you have.

Thank you. Our next question comes from Ignacio Ulargui from BNP.

Ignacio, please go ahead.

Thanks very much, Gloria, Jacobo, for the presentation, and for taking my questions. I have two questions, if I may.

One is on RWA performance in the quarter has seen a very significant decrease in the quarter. Just wanted to see what was driving it.

The second question is related to deposits. If I just look to rather than time deposits and current accounts, what are the percentage of deposits where you are actually paying interest-bearing, and which are not?

Could you provide us with that disclosure? Thank you.

Thank you, Ignacio. Regarding our risk-weighted assets, I would say that first of all, there is, as seasonality in this third quarter.

Normally is a quarter where the loan growth is fairly flat. Seasonality has also component of mix change, we tend to have less volumes related to corporate banking that have a higher capital consumption versus, for example, mortgages, which is quite lower.

I would also mention that during the quarter, we've done some sale of portfolios that also means that there is some IRB shortfalls that reduce the consumption of the overall book. As I mentioned, a larger mix of, I would say, retail exposures versus corporate banking exposures, and that is the main explanation.

Remaining... You want to answer the second one?

No. I think your question was related to if there's any potential disclosure on where are we capturing or bringing on board new clients, I think we've been, as with a marketing campaign related to digital accounts during the summer.

This is, as it's public information, public rates. That we have launched campaigns of around 3% in digital accounts in Spain.

That we are launching a campaign in Ireland with a 3.3%. This is, I would say, the most transparent information about our marketing campaigns.

To answer, I think that around 30%, 40% of the total deposit base is rate-sensitive. That's what I would say.

Thank you. Our next question comes from Alvaro Serrano at Morgan Stanley.

Alvaro, please go ahead.

Good morning. I guess my two questions are really follow-ups.

One is just on loan demand. I completely get the seasonality, and completely understand.

If I look at the year-on-year growth in corporate, it looks like a bit better in Spain. I just would appreciate any comments around loan demand more broadly, as we think about the next few quarters and next year.

Do you think it's improving or stable, good but stable? Maybe a comment on that second derivative of loan demand, in particular in corporate.

Then my second question is, again, feels like a follow-up on your loan-to-deposit. Now continues to tick up now at 98%.

Should we expect an acceleration of sort of deposit growth going forward in Ireland, in Spain, given your self-imposed 100% sort of loan-to-deposit sort of limit or cap? Or would you be willing to reassess that and go above 100%?

How should we think about that deposit and loan-to-deposit ratio going forward? Thank you.

Good morning, Alvaro, I'll take your first question. Loan demand, I think we are sharing again a good quarter of loan growth, mid-single digit, quite as expected.

We're not expecting to accelerate that figure. As we are quite selective on the type of relationship that we enter with our specific type of client or our client profile.

We are not expecting any change. The behavior in the corporate market activity has been extremely positive.

We are not perceiving any change in loan demand, we do expect in following quarters to keep this positive level of growth in the corporate banking activity. The overall book, even if we are not providing guidance for next year, as we've been delivering sort of close to mid-single-digit level of growth of the loan book during the past years and quarters, etc., obviously we do not expect any major changes on that.

On the deposit-to-loan, I pass it to Gloria.

Yeah. There we have an internal board of directors limit of 100%, initially you can expect us to be below 100% loan-to-deposit ratio.

We feel very comfortable in the levels we are now, and we have no problems to fund the growth that we foresee in the next years. What you can expect going forward is Ireland autofinancing its delta, its growth in the year.

You can foresee Portugal attaining self-funding completely. In the Netherlands, we will fund it, as we've mentioned already, in the wholesale market via securitizations, where the funds are 100% matched, therefore there is no liquidity risk at all.

There will be a deposit growth that is in line with that objective of being below 100% loan-to-deposit ratio.

Thank you. Our next question comes from Borja Ramirez from Citi.

Borja, please go ahead.

Hello, good morning. Thank you very much for taking my questions.

I have two. Firstly, on the deposit side, as a bit of a follow-up from the prior one, because now you are present in three of the markets where there is one of the highest system deposit growth, namely Netherlands, Ireland, and Portugal.

I would like to ask, what are the commercial actions you're taking to gather deposits in those regions? I understand in the Netherlands you don't have a deposit-gathering business, you just closed the acquisition, but maybe given it's a very attractive market, maybe you could plan to gather deposits there.

Then my second question would be on valuation. Given your superior growth profile historically, I can see that the premium versus peers has narrowed, and now it's maybe trading at a lower valuation than domestic peers on a P/E basis.

I would like to ask if the market is missing anything in your view, because historically Bankinter has traded at a premium to the sector. Thank you.

I think, obviously yes, the premium versus peers is narrowing, and this happens always when the economic cycle is positive. What the market is not looking at is the quality of the growth.

It is not just growth for growth, it's profitable growth, so that it's also sustainable through the cycle. That is what I would say.

Thank you, Gloria. Let me add that I think also the drivers of our earnings are becoming increasingly structural rather than cyclical.

We have Portugal and Ireland that are scaling faster than Spain. We have the wealth management and alternative investment businesses, which are increasing their contribution.

We have AI and technology improving scalability. We have customer relationships that tend to be even deeper through investment products.

Basically, at the end of the day, Borja, we are continuing to generate double-digit earnings growth, 20% plus return on tangible equity, strong capital generation, best-in-class efficiency. Basically, we are a quite great value in times like these periods of uncertainty, and our prudency and risk profile is something that is absolutely differential versus others.

We see ourselves as a diversified compounding platform capable of generating value across different economic and interest rate cycles, and probably this is not the case for other institutions. Regarding the first point regarding commercial actions, as you've mentioned, we are not expecting to do anything in deposits in the Dutch market.

We're happy where we are, we continue to be competitive in Spain, Portugal, and Ireland. We are building our franchise in Ireland, and it's a long-term strategy there, and as Gloria mentioned at the beginning, we are targeting to have a much more equilibrated position from a loan-to-deposit perspective in Ireland.

Basically, nothing new, but a lot of focus.

Thank you. Our next question comes from Ignacio Cerezo from UBS.

Ignacio, please go ahead.

Good morning, and thank you for taking my questions. The first one is on the time deposit balance is up around €1.5 billion, we've talked about it.

If you can let us know if that pick-up basically has happened linearly through the quarter, I'm thinking on whether we have seen the negative impact on the cost of deposits of that mix shift actually in Q3, or is something that is going to get bigger in coming quarters. The second one is on Tulp, there's €400 million mortgages already incorporated in the lending book this quarter, probably too early actually to have very firm numbers, but if you can give us an order of magnitude of how quickly that lending growth, or that lending book actually can grow in the future.

Thank you.

Tulp had on its books €400 million of mortgages, it's not new production of this period where we have month and a half we've had Tulp on our books. We think that we can start producing mortgages funded by us, by Bankinter, by the end of the year, you will see very little productions this year because there is a time lapse between to actually sign the mortgages and have them accounted in the books.

You can expect next year to have a production of around, I would say, €800 million, €1 billion in the Netherlands. That would be the objective.

Yes, good morning, Ignacio, regarding the time deposits. We're not buying deposits.

As Gloria was mentioning, we are acquiring customer and monetizing broader and long-term relationships. One year ago, our cost of deposit was at 82 basis points.

Today we are at 86% in the quarter, the increase remains well below the movement in Euribor. As I mentioned before, there is more demand for time deposits, bearing in mind that, for example, in Portugal, which is a different market than in Spain, banks offer publicly term deposits, but not in Spain.

For example, in Spain, banks are not offering publicly term deposits, they are offering in a tailored perspective, in a case-by-case situation. Since we have sophisticated client base, it is normal that our clients sometimes tend to demand term deposits.

As I mentioned before, the overall proportion of term deposits versus overall sight deposits is not changing as it did some years ago. Basically, it's very stable.

There is, as more focus on digital accounts, other type of products, salary accounts, etc., there is demand for term deposits, absolutely, but at the end of the day, the overall mix is not barely changing.

Thank you. Our next question comes from Carlos Peixoto from Caixa.

Carlos, please go ahead.

Hi, hello.

Hi, yes, we can hear you now. Yes, thank you.

As I was saying, most of my questions have already been answered, but I was just focusing a bit on the other provisions, which this quarter were relatively low, I would say, on historical standards, or at least looking at the recent past. Just wondering what levels of provisions you think could be recurrent on this level, and this also connecting a bit to the previous question on the cybersecurity risk.

Should we see here some rise in litigation costs going forward, or what levels do you see as seasonable here? Then the second question would also be a bit of a follow-up, but on the deposit beta, what are your expectations on that front over the next quarters?

Thank you.

Good morning, Carlos. No, basically there's some sort of seasonality in the other provisions figures for the quarter.

The overall picture, as you've seen in the slide, is that year after year there is a slight reduction in litigation costs, and we are not expecting anything neither related to the cyber security topic. Basically, nothing special apart from seasonality.

We might see, I don't know, next quarter a little bit more, a little bit less, it's the overall picture, and the overall picture there's no news basically, and as year after year there is a slight decline, and that's something that we would expect in coming quarters or years. Regarding the deposit betas, as I mentioned before, I think the cost of deposits is increasing much lower than the level of Euribor, and as we are still expecting more ECB rates increases.

You see that Euribor 12 months is expecting higher levels of Euribor in the coming quarters, and also as a reference, we see the T-bills, at least in Spain, getting closer to 3%. Obviously, and we have 1/3 of our clients which tend to be sophisticated, and they try to be rate-sensitive, as Gloria was mentioning before, we do not expect higher levels of beta that currently we do have.

In fact, as I mentioned in last quarter session, we do expect a decline in beta over time.

Thank you. We have time for one last question.

The next caller is Francisco Riquel from Alantra. Francisco, please go ahead.

Thank you. I want to focus on fees.

Asset management and brokerage fees were up 19% in Q2, excluding the extraordinary Helia fees, had a slowdown to 11% in Q3, below the growth in AUMs of 15%. I wonder if you can comment on the quarterly trends, market headwinds, net new money, brokerage versus asset management, what can we expect?

Then also on transactional fees have also slowed down, is now flat year-on-year. I wonder if you have to remove fees to increase customer retention, or what are you seeing here also?

Thank you.

Hi, good morning, Paco. This third quarter what we've seen is a little bit less activity in the brokerage.

Also, we have to say that last year the third quarter was extremely positive. We have plenty of geopolitical issues, comments from leaders in the world that make a little bit more volatile the market.

It is correct that we've seen probably less activity in the broker. In the transactional fees, again, we have a comparison issue there, but also it is true that our FX fees during the quarter have been a little bit lower than expected.

We think it's more a seasonality issue, because we have other type of transactional fees like payment and collections, endorsement, that they have behaved as expected. This is what I can mention.

Regarding the assets under management fees, of course, the volumes stay at quite high levels, even with the turbulence that we've seen in September and October, it is not basically a source of revenue decrease. In fact, I think from that perspective, for the time being, we're still on track on what we expect for the rest of the year.

To answer regarding net inflows, it has been in the last quarter, the third quarter, €1 billion in investment funds and other off-balance-sheet.

Thank you, Gloria and Jacobo. We thank you all for your interest and participation in the webcast.

For those of you who were unable to ask your questions during the call, the Investor Relations team will be available afterwards. Thank you all very much for joining us today, and have a wonderful day.

Bye.